There are plenty of ways for organizations to lose money—bad business decisions, tough competition, fickle markets. But TheHRSpecialist.com often highlights one of the most unexpected and insidious fiscal perils: employees who steal. A few recent cases:
- A civilian employee of the Marine Corps in North Carolina used a government credit card to steal $74,000.
- A Pennsylvania health care executive set up a series of shell companies to invoice his hospital. For 12 years, he pocketed the checks, taking $1.7 million.
- The comptroller of a Florida nonprofit skimmed $1.6 million in withholding from employees’ paychecks, leaving the organization’s budget in tatters.
U.S. businesses annually lose an average of 6% of revenues to employee fraud and theft, and smaller businesses are even more vulnerable. It’s well worth it to focus security efforts on stopping in-house thieves.
Here’s a sketch of whom and what to watch out for.
Who are those masked men (and women)?
Position: Low-level workers commit 68% of all workplace fraud, more than managers (34%) and execs (12%).
Tenure: Long-term employees tend to steal more. Two reasons: They’ve likely advanced to higher positions and they’ve earned their supervisors’ trust.
Gender: Men commit only slightly more workplace fraud (53%) than women (47%). But men take nearly three times more than women when they steal.
Age: Nearly half of perpetrators of workplace fraud are over age 40. And older employees, typically because of their higher rank, collect more in their scams.
Background: Workplace con artists typically don’t have criminal backgrounds (83% have clean records), but they do feel underpaid and unhappy on the job.
Most common scams
More than two-thirds of all occupational fraud involves some form of fraudulent disbursement of funds. Here are the top five categories to watch out for:
- Billing schemes in which an employee submits invoices for fake goods (pocketing the check) or to pay for personal items.
- fraud involving bogus claims for additional hours, or manipulation of an employee’s rate of pay.
- Expense reimbursement scams that rely on fake or inflated business expenses.
- Check tampering in which an employee forges, alters or steals a company check.
- Register schemes that let retail employees make false entries on a cash register to conceal stealing cash.
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